A2 Milk receives final SAMR approval tied to a2 Pōkeno acquisition

The a2 Milk Company has received approval from China’s State Administration for Market Regulation (SAMR) to transition two China label infant milk formula product registrations to a2™ branded products, completing the final regulatory requirement under its Pokeno facility acquisition. The company expects to launch the new products later this calendar year, with no change to previously communicated timing or estimated financial benefits.

a2 Milk secures Chinese regulatory approval for new infant formula products

The SAMR approval applies to two China label IMF product registrations acquired as part of the a2 Pokeno facility acquisition. This represents the final regulatory step required under the acquisition terms.

The new products are expected to launch later this calendar year. Management confirmed there is no change to the timing or estimated financial benefits previously communicated to the market.

With regulatory approvals now obtained, a2MC no longer has the right to unwind the acquisition of the a2 Pokeno facility.

Pokeno facility acquisition now finalised

With regulatory approvals obtained, a2MC confirmed it no longer has the right to unwind the acquisition of the a2 Pokeno facility.

The removal of the unwind right provides certainty on the company’s manufacturing footprint and China market strategy. The facility forms a core component of a2MC’s vertical integration approach in its largest growth market.

$300 million special dividend expected

The Board is expected to convene soon with the intent to declare a $300 million special dividend. The dividend will be fully franked and unimputed.

Timing of payment and other details will be confirmed in a separate announcement once the Board declares the dividend. This capital return was previously indicated at the time of the Pokeno acquisition announcement, conditional on receiving the required regulatory approvals.

The fully franked distribution represents a substantial shareholder return and signals management confidence in the company’s balance sheet strength and cash generation capacity following the acquisition.

Management commentary

David Bortolussi, Managing Director and CEO

“SAMR approval marks a significant milestone in our China growth strategy and Supply Chain transformation. It supports long-term growth in our core IMF business through market access and innovation, accelerates the development of advanced nutritional manufacturing capability, and captures attractive financial returns through incremental brand contribution and vertical margin capture.”

Strategic context and next steps

CEO David Bortolussi outlined three strategic pillars the SAMR approval supports:

1. Supports long-term growth in core IMF business through market access and innovation
2. Accelerates development of advanced nutritional manufacturing capability
3. Captures attractive financial returns through incremental brand contribution and vertical margin capture

Investors should watch for the Board’s formal dividend declaration announcement and the new product launch later in the calendar year. The approval validates a2MC’s vertical integration strategy and positions the company to capture margin from both brand growth and manufacturing economics in China’s regulated infant formula market.

The company expects to launch the new products later this calendar year, with no change to previously communicated timing or estimated financial benefits.

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